Second Sony Ericsson phone has software problem

STOCKHOLM A second of Sony Ericsson's new smartphones, key to its strategy for returning to profit next year, has been hit by software problems in Britain ahead of a critical sales period.

A spokesman for the world's fourth-largest mobile phone maker said a number of users of the new Aino smartphone, part of the company's Christmas line-up, had experienced problems using the touch screen.

"Obviously we are working as quickly as possible to solve it (the issue)," Sony Ericsson spokesman Mattias Holm said, adding the issue affects only a small number of customers in Britain.

"Aino and Satio are Sony Ericsson's key products for the final quarter," said analyst Geoff Blaber from British consultancy CCS Insight.

"These problems couldn't come at a worse time -- just as the market approaches the highest volume weeks of the year. They have days not weeks to fix these issues," Blaber said.

Sony Ericsson's Holm said the software problems had only affected a small number of customers in Britain and had not damaged Sony Ericsson's brand.

"At the moment, we don't see any damage or harm done," Holm said. "It is a contained issue affecting only a small number of consumers."

Success in the smartphone market is a key element in Chief Executive Bert Nordberg's plan for returning the firm to profit next year.

Smartphones, with advanced mobile Internet and networking functions, have been the one bright spot in an otherwise depressed handset market over the last year.

While mobile phone makers have been hurt by the global downturn, Sony Ericsson has also suffered because it has lacked a strong smartphone offering to rival Apple's iPhone and Research in Motion's BlackBerry.

Sony Ericsson lost 199 million euros ($297 million) in the third quarter and has not made a profit since the first quarter of 2008.

(Additional reporting by Tarmo Virki in Helsinki; editing by Will Waterman)